Investing in commercial property is one of the most secure and potentially rewarding business opportunities. As long as you maintain the building and cater to your tenants, they’ll continue to pay rent and help you pay off your investment.
Just as importantly, assuming you take good care of the property, it will only increase in value over time. Should you decide to sell the commercial property in the future, you’ll most likely make a profit.
Especially if you hire the No. 1 property valuation company in your area. There will be a bigger chance of you getting the most accurate price for your property in order for you to sell it faster.
But how can you enhance the property to ensure it becomes more valuable? What can you do to justify charging more for rent or asking a higher price when selling?
Not sure what your options are? We’re here to provide a little insight. Keep reading for the top six things you can do to increase property value and keep your tenants happier, longer.
- Provide Adequate Parking
Depending on where your commercial property is located, parking can be difficult for your tenants. In busy cities, they might have to park on the street or even pay for parking.
You can learn how to increase your property valuation by providing a better parking solution for your tenants. For example, you can take out some of the landscaping on the business property to create a safer, closer, and more convenient parking lot.
This is equally important if you own a residential rental property or apartment complex. People don’t like parking on the street. If you can provide off-street parking with overhead coverage, your property will be more valuable.
- Offer Maintenance Services
You can make more money off of your commercial investment by sweetening the pot for your tenants. Make their life easier by covering all the building maintenance and grounds keeping. Yes, you’ll need to pay for these services, but you’ll be able to charge your tenants more for rent because you offer them.
This also includes common area maintenance services like snow removal and landscaping. Your tenants will be happier because their business will look more professional.
- Update Appliances in Residential Rentals
If you own a residential commercial property, you can increase property value by updating the in-unit appliances. This is especially beneficial if the current appliances are more than a decade old.
When house hunting, people always look for updated kitchens with modern appliances. It makes preparing meals, hosting parties, and spending time with family much easier and more enjoyable.
The appliances you should update include:
- Clothes washer
- HVAC unit
- Water heater
Not only will you be able to rent your unit for more money with updated appliances, but it will also be easier to find new tenants. Advertising a rental with new appliances is sure to pique the interest of potential renters.
- Make Modern Renovations
Modern appliances go a long way toward enhancing property value. However, you must also consider the style, layout, and age of your building.
While some older buildings can be charming, tenants typically want something that feels more modern. More importantly, making renovations to modernize your commercial property will only add to its value.
Furthermore, there are capital allowances for improvements made to your building that can be claimed in your taxes. Much of the money you spend making improvements can be used as tax write-offs on your business taxes. This will help you save money at the end of the year.
If you’re building is a few decades old, consider the following renovations:
- Updated electrical
- Modern windows with better insulation and climate control
- New flooring
- New roofing
- Updated design and decor
- New interior and exterior paint
- And more
The types of renovations you make depend entirely on the type of building you own and its purpose. For example, the renovations made in an office building would be much different than those made for an industrial warehouse.
- Add Amenities to Your Building
If improving commercial property value is your goal, think about the amenities that would drive tenants to spend more money to get into your building. For example, if you own an office complex that houses several businesses, consider providing childcare services on-site to make it easier for employees who have children.
If you have an apartment complex, think about the different ways you could add luxury and convenience for your renters. Common apartment complex amenities include:
- On-site or in-unit laundry rooms
- Community pool, sauna, hot tubs
- Tennis courts
- Playground equipment
- Fitness center
- Business center (fax machine, computer, printer, copier, etc.)
- And more
The key to enhancing your commercial investment is making it more valuable and attractive to tenants. The more tenants want to rent your property, the more leverage you’ll have for charging higher rent or asking for a higher sale price.
- Change the Building Usage and/or Zoning
Finally, increase the value of your commercial property by changing the zoning and purpose of the building. For example, if you buy a large warehouse or industrial space, you can split it up into different rental units. Then, convert the units into retails spaces, service centers, health and fitness units, etc.
As noted, this might require changing the zoning status through the city. However, this is a great way to significantly increase the earning potential of your commercial property.
If you have the financial backing to make large renovations, you could also consider modifying a hotel into an apartment complex. This would be a great way to create a residential rental complex without building from the ground up or paying exorbitant prices for an existing complex.
If you’re going to convert an existing commercial property for different purposes, assess the area first to ensure its success. A warehouse might make an amazing retail space, but not if it’s located in the wrong part of town.
Want to Improve Your Commercial Property?
As you can see, there are countless ways to increase property value, no matter what kind of commercial property you own. As with anything in business, however, you generally need to spend money to make money. But if you do your research and execute your plan properly, it can pay off big time.
If you want more business tips and property advice, look through some of our other articles while you’re here. We created our website to help entrepreneurs like you make informed decisions and wise investments.